-2 more suspects arrested in London attack-- Like the United States only a month ago, Britain on Thursday was once again grappling with an all-too-familiar plague — homegrown terrorism. The images of two men captured on amateur video, bloodied and ranting after striking a British soldier with a car and hacking him to death on a southeast London street, became seared into the British consciousness on Wednesday. A day later, British officials investigating the case arrested two other people — a man and woman, both 29 — on suspicion of conspiring to commit murder. Two additional suspects arrested in hacking attack that killed a soldier, 25, in southeast London. In this multicultural nation that has stood alongside the United States in Iraq and Afghanistan since the attacks of Sept. 11, 2001, the population was processing the news that both alleged assailants in Wednesday’s attack — ages 22 and 28 — were fellow Britons. One of them, Michael Adebolajo, a British man of Nigerian origin, had grown up in a devout Christian family in suburban London and converted to Islam a decade ago, according to the BBC. By Anthony Faiola

-IMF chief testifies for second day in French court about her role in arbitration case--PARIS — Christine Lagarde, managing director of the International Monetary Fund, submitted to a second day of interrogation Friday about her role in the settlement of a multi-million-dollar business dispute when she was French finance minister in 2008. Lagarde, in her trademark scarf and a light gray suit, showed up smiling in the early morning for her second session of grilling by a trio of investigating magistrates at the Court of Justice of the Republic, a special judicial panel that handles official malfeasance cases in France. By Edward Cody.

-With ‘Abenomics,’ Japan catches a sense of revival--TOKYO — After two decades of chronic recession, Japan again feels like a boomtown. Its biggest companies are raking in money. It has the world’s best-performing stock market. The latest forecasts suggest Japan, in the next year, could grow more quickly than any wealthy nation but China. Consumers — especially the wealthy ones — have caught the spirit. They’re splurging at high-end restaurants, department stores and auto showrooms. Ferrari sales this year are up nearly 50 percent, according to media reports. The revival is only months old, and its staying power remains very much up for debate. But already it has surpassed what many Japanese thought was possible for an aging country whose decline had started in recent years to feel inexorable. By Chico Harlan

-Early Putin biography gives insight into dark mood of distrust in president’s inner circle--PARIS — At a cafe on the Place des Vosges, Natalia Gevorkyan is picking at a salade verte and thinking about betrayal. It’s a central theme in the worldview of Vladimir Putin, the Russian president and a man who once spent many hours telling her of his life and his credo. It was natural for a KGB officer to suspect betrayal all around him, she says, and although Putin left the agency nearly two decades ago, he has never shaken its particular view of human nature. Yet today, an air of suspicion seems to permeate the Kremlin more than at any time since he came to power. Gervorkyan was a co-author of an authorized biography of Putin, hastily slapped together in 2000, just after he became acting president. The book, “First Person,” was an early attempt at image-making and legend-building. By Will Englund

-Analysis: Obama expresses regrets but seeks to retain anti-terror powers--President Obama declared an end to a fearful chapter in American history on Thursday and demanded more from the country and himself as it enters the next. Obama’s speech at the National Defense University reflected an unusual ambivalence from a commander in chief over the morality of his administration’s counterterrorism policies. In his wide-ranging discussion of the issues at stake, Obama also suggested the depth of the difficulty he has faced in fulfilling his pledge to bring America’s national security policies fully in line with its founding values. He discussed a drone program that he acknowledged kills civilians, a far-reaching investigation into news leaks that he said demands review, and an offshore prison for terrorism suspects that he has been trying to close for years. By Scott Wilson

-The Federal Eye: Post-ABC poll: Most Americans still disapprove of sequester--The government-wide spending cuts known as the sequester remain unpopular for most Americans, with little difference in opinion across party lines, according to a Washington Post-ABC poll released Friday. Thirty-seven percent of Americans say they have felt a negative impact from the sequester, the poll shows. The data indicates 56 percent of Americans disapprove of the sequester, which is roughly on par with the 57 percent who felt that way in April and the 53 percent in March. Political affiliations seem to matter little, with 54 percent of Republicans disapproving of the cuts, compared to 59 percent of Democrats. By Josh Hicks and Scott Clement

-The Fix: How the IRS scandal helped immigration reform--On Wednesday the Senate Judiciary Committee approved a bill that would comprehensively overhaul the country’s immigration system. It was a major step for a Congress that has shown an inability to do just about anything over the past few years. You probably missed it. The immigration bill’s forward progress — it now heads to a full floor debate next month — was entirely drowned out by a series of House and Senate committee hearings on the IRS’ acknowledged targeting of conservative groups. That drowning out, however, was, quite simply, the best thing that could have possibly happened for the immigration bill. In fact, without it, the immigration legislation’s path out of committee might not have been so smooth. By Chris Cillizza and Sean Sullivan

-Boy Scouts vote to allow openly gay youths, maintain ban on gay adult leaders--The Boy Scouts of America on Thursday ended its ban on openly gay youths but maintained a prohibition on gay adult leaders, a decision framed as a compromise but one that could lead to litigation and thousands of defections from one of America’s largest youth organizations. The immediate impact of the policy change, endorsed by more than 60 percent of the organization’s 1,400 voting members, is likely to vary widely. Mormon officials on Thursday night said the church would stay involved with Scouting “based on our mutual interest in helping boys and young men understand and live their duty to God and develop upright moral behavior.” By Michelle Boorstein

-Google faces new FTC probe over display ads--Federal investigators have begun probing whether Google is using its increasingly potent position in the online advertising market to undermine competition, an issue officials have monitored since its acquisition of digital ad company DoubleClick in 2008, said people familiar with the inquiry. The probe — in an exploratory phase, according to these accounts — comes just months after the Federal Trade Commission closed an unrelated investigation of allegations that Google was using its power in the lucrative search business in ways that violated antitrust law. This is the first time we’ve heard that Google’s secretive moonshot lab has bought an outside company. It remains unclear whether the FTC has concluded that Google violated any law, and some preliminary inquiries end with no action against companies. By Craig Timberg

-Wonkblog: Have U.S. states figured out a way to avoid a global race to the bottom on taxes?--This week’s uproar over Apple’s tax strategies merely highlighted something that everyone in the tax world already knows. The U.S. corporate tax system is needlessly complex, dysfunctional and needs to be fixed. Could there be an elegant solution right under our noses? Apple’s Tim Cook and many others have proposed lowering the top U.S. corporate rate, which currently stands at 35 percent. Doing that alone, though, misses a root problem in the current system: the incentive for companies to shift profits toward low-tax countries. Apple’s adventures in Ireland are just a hint of how much big firms have flocked to countries with low tax rates. By Jia Lynn Yang

-Institutional Shareholder Services settles civil charges on leaked data--Institutional Shareholder Services, the Rockville-based company that recommends to institutional investors how they should vote in corporate elections, agreed to pay $300,000 to settle civil charges involving an employee who leaked private client data. The Securities and Exchange Commission alleged that the employee, who no longer works at ISS, revealed to a “proxy solicitor” how more than 100 clients were voting. Information was leaked from about 2007 through early 2012 in exchange for pricey meals, an airline ticket and tickets to concerts and sporting events, the agency said. Large institutional investors, such as mutual funds, typically hold shares in thousands of companies. By Dina ElBoghdady